October 16, 2014

Iowa Judge Bars Las Vegas Health Products Marketer

Iowan complained that Leading Health Source Inc. sold her ailing, elderly parents more than $44,000 in supplements

(DES MOINES) An Iowa judge today barred a Las Vegas company from marketing health or nutrition-related products to Iowans, after an Eastern Iowa woman complained that the company charged her elderly parents more than $44,000 for health supplements that telemarketers claimed would address a wide range of health issues.

Polk County District Court Judge Robert J. Blink issued the permanent injunction, through a consent judgment, against Leading Health Source Inc. The order also names owners Broc Addis, Janelle Addis, Tom Simon, and Doris Simon, company representative Reed Seely, and telemarketer Anthony Sherman. The settlement resolves a consumer fraud lawsuit filed Wednesday.

“We demanded that Leading Health Source pay back every dime to this Iowa couple as a condition of our settlement, and the company has done so,” Miller said, noting that refunds and reversed credit card charges added up to nearly $44,600.

“As far as we know, these were the only Iowans with substantial losses,” Miller added. “But if others come to light and want a refund, the company will have to provide one.”

Palo Woman Intercepted Telemarketing Call to Mother, Found Parents’ Billing Records
On April 3 a Palo woman, whose elderly father has Alzheimer’s and mother has experienced serious health problems, intercepted a telemarketing call intended for her mother. Following the call, the woman discovered boxes of supplements at her parents’ Cedar Rapids home and multiple credit card charges exceeding $44,000 over 20 months.

Woman Complained Following Iowa Fraud Fighters Event
On May 1 in Cedar Rapids, the woman voiced concerns to a Consumer Protection Division investigator at an “Iowa Fraud Fighters” event, an ongoing statewide program promoting consumer protection awareness, at which Iowa Insurance Commissioner Nick Gerhart and Attorney General Tom Miller were keynote speakers. Following the event, the woman filed a formal complaint with the Attorney General’s Consumer Protection Division.

Investigation: Company Aware of Couple’s Health Issues, Made Unsubstantiated Health Claims, Sold Large Quantities of Products to Couple
An investigation determined that Leading Health Source was aware of the Cedar Rapids couple’s vulnerabilities. Telemarketers’ handwritten notes indicated that the woman had “memory” issues and that the man had “dementia.”

According to Miller, Leading Health Source initially resisted requests for refunds, claiming that the elderly couple’s extremely large purchase volume occurred because they were “distributors.” Miller called the claim absurd.

Telemarketing scripts obtained through the investigation indicated that telemarketers made dramatic health claims about the products, claiming in some cases that their health products would address such serious afflictions as Alzheimer’s disease, diabetes, arthritis, and Multiple Sclerosis. One script claimed that a terminal cancer patient had been cured by a company product: “The cancer was GONE!”, according to the script.

“Those who make dramatic claims about the benefits of some health-related product have to be able to prove it does what they claim,” Miller said. “In this case Leading Health Source couldn’t do that. Unsubstantiated claims lead to lawsuits and injunctive orders, like the one here,” Miller added. “This Iowan asked all the right questions, confronted the aggressive telemarketers, reported it to us, and helped undo the financial damage to her parents.”

Court Order Forbids Future Membership Sales in Iowa
Miller also noted that the company sold memberships that involved discounted future purchases of pills and other products. Miller alleged that this type of marketing violated Iowa’s Buying Club Law, and the injunction bars any future membership sales in Iowa.

General Cautions
Miller urges Iowans to be leery of anyone claiming extraordinary health benefits from their pills or other products, noting that people with serious health problems can be especially vulnerable. “Consumers should maintain a healthy skepticism when someone claims they have a miracle cure.”

Those who try to profit from health fraud scams often make claims about preventing, treating or curing various ailments and conditions, and they promote other purported benefits. Claims often involve weight loss, “anti-aging,” arthritis, sexual enhancement, body building, and even life-threatening conditions such as cancer.

Beware of marketers that trumpet a “miracle cure,” “scientific breakthrough,” “new discovery” and any product that claims a “secret ingredient.”

Get advice from trusted health professionals who know you and are best situated to evaluate the best treatments for you—particularly if you are currently taking prescription medication.

With health fraud as with other consumer frauds, if it sounds too good to be true, it is almost certainly not true.

Some fraudulent health care products can do much more than harm your wallet—they can harm your health. Serious conditions like cancer, diabetes & HIV require individualized treatments by a physician. Unproven products and treatments can be dangerous, and may cause harmful or even life-threatening delays in getting the proper diagnosis and appropriate treatments.

For more information or to file a complaint, contact the Consumer Protection Division through the Attorney General’s website at www.IowaAttorneyGeneral.gov or email directly to consumer@ag.iowa.gov. Consumers can also call the Consumer Protection Division at 515-281-5926, or outside the Des Moines area, toll free, at 1-888-777-4590.